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Exam 3: Applying the Supply-And-Demand Model

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Question 31

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The percentage change in the quantity supplied in response to a percentage change in the price is known as the

A) slope of the supply curve.
B) excess supply.
C) price elasticity of supply.
D) All of the above.

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Question 32

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Only in the case of perfectly inelastic demand will consumers pay the full amount of a specific tax or ad valorem tax.

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Question 33

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Which of the following goods probably has the lowest (absolute value) short-run price elasticity of demand?

Explain why a tax increase on cigarettes in one state might not lead to a substantial price increase for all consumers in that state.

Suppose the inverse demand curve for a good is expressed as Q = 50 - 2p.If the good currently sells for $3,then the price elasticity of demand is

The short-run price elasticity of demand for refrigerators is relatively inelastic.

Suppose that a specific tax of $3 is imposed on producers of bread.The bread market supply is Qs = 10 + 0.5P and the bread market demand is Qd = 100-P.What is the change in the equilibrium quantity of bread induced by the tax incidence?

If an increase in income results in a rightward parallel shift of the demand curve,then at any given price,the price elasticity of demand will have

-The above figure shows the demand curve for crude oil.The demand curve has unitary price elasticity when price equals

The market demand for wheat is Q = 100 - 2p + 1p_b,where p_b is the price of barley.If the price of wheat is $2 and the price of barley is $4,the price elasticity of demand

If the demand for orange juice is expressed as Q = 2000 - 500p,where Q is measured in gallons and p is measured in dollars,then at the price of $3,the demand curve

If the demand curve for orange juice is expressed as Q = 2000 - 500p,where Q is measured in gallons and p is measured in dollars,then at the price of $3,elasticity equals

The elasticity of demand for employees is -0.50.It is also estimated that the existing minimum wage (price floor) has increased the raise the wage by 25% above equilibrium wage.How much would the employment change if the price floor was eliminated?

A given supply curve has a zero intercept.At the current equilibrium price the price elasticity of supply equals

If the supply curve is perfectly inelastic and the demand curve is a downward sloping straight line,what is the effect of a consumer ad valorem tax on equilibrium price and quantity?

Suppose the market for grass seed can be expressed as Demand: Q^D = 100 - 2p Supply: Q^S = 3p Price elasticity of supply is constant at 1.If the demand curve is changed to Q = 10 - .2p,price elasticity of demand at any given price is the same as before.Yet,the incidence of a tax falling on consumers will be higher.Why?

Explain why short-run demand for frozen fish sticks may be more price elastic in the short run than in the long run.

Suppose that a specific tax of $3 is imposed on consumers of bread.The bread market supply is Qs = 10 + 0.5P and the bread market demand is Qd = 100-P.What is the consumers' tax burden?

The supply of movie tickets at one theater's box office for this Saturday's 4:30 show of a new movie is

A vertical supply curve exhibits